Why Facebook is betting a billion dollars on creators

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Last month, Instagram hosted its first week of Creator, a virtual event that the company described as “three life-changing days with news stories and celebrity extras”. One of those downfalls was CEO Mark Zuckerberg, who appeared briefly to share the message with the authors.

“I think any good vision of the future must include many more people who can make a living by expressing their creativity and doing the things they want to do, instead of the things they have to – and having the tools and the economy around them, supporting their work is crucial.” he said. “Our goal is to be the best platform for creators like you to make a living.”

This week, Zuckerberg went even further, announcing that Facebook was planning to do so invest a billion dollars for creators by the end of 2022. The investment will fund bonus programs, creator funds and other monetization programs to strengthen all the creator line on its platform.

That Facebook directs so much money and resources toward creators is not only indicative of the opportunity the company sees, but also of how many countries it must create.

Facebook just hasn’t done much for creators in years. Although Instagram has long had its own community of influencers, the company has at times tried to limit their reach. They are reportedly the founders of Instagram uncomfortable with increasing influence and introduced an algorithmic feed to ensure that users see more posts from friends and family than brands and companies.

Although YouTube has been offering monetization features for more than a decade, Instagram did not offer any revenue sharing feature until last year. And many creators have often clashed with Instagram. The company’s ever-changing algorithm has sparked suspicions that it “bans shadows” or otherwise punishes users who post too much or about “wrong” topics.

“Facebook is late with the game in terms of providing significant support to the creative community,” says Qianna Smith Bruneteau, founder of the American Council of Influence, a trading group that represents the creator industry.

But Facebook is now trying to reverse those perceptions. For the past year, the company has been constantly rolling out new tools for creators to make money. Since last May alone, the company has introduced a dizzying number of money-making features.

On Instagram, creators can now make money advertising on IGTV or open them own shops. Badges and products can be sold in live broadcasts. They can host paid virtual events on Facebook, promote fan subscriptions, or sell gifts in apps in live streams or audio rooms. They will soon be able to run paid newsletters, earn an associated commission from products their followers buy, and participate in branded content market. The company is also launching several new ones bonus programs which will pay creators to sign up for IGTV ads, create reels or fill live milestones.

Facebook

Zuckerberg and other executives now regularly talk about the creators and the opportunity they represent. The company is so eager to win over the creative community that it has vowed not to cut their earnings by 2023.

Li Yin, founder of Atelier Ventures, a venture capital company that invests in the creators ’economy, says interest in creators has increased because the industry has become so large that platforms can no longer be ignored.

“I don’t think for a long time there was a need to consider creators separately as a separate segment that needed specialized features or resources,” Jin says. “I think what has changed is that … the content of these creators drives a disproportionate amount of activity and engagement on the platforms.”

The fact that Facebook is behind the creator economy also means that the company is facing an incredible amount of competition. TikTok, which is reputed to be a creator-friendly algorithm, has just gone through 3 billion downloads, the first non-Facebook-owned app to do so, according to the analyst company. Sensor Tower. Users of TikTok and its Chinese counterpart Duoyin, spent more than half a billion dollars on the app during the second quarter of 2021 alone. In the United States in 2020, TikTok was significantly ahead of Facebook and Instagram in user engagement, according to App Annie.

TikTok outperforms Facebook in terms of time spent per user.

App Annie

Meanwhile, Twitter, Snapchat, Pinterest and other platforms are also pouring money into new initiatives for creators. “There are a limited number of creators and everyone is competing for them,” Jin says.

Facebook has offered various explanations for its sudden interest in creators. Zuckerberg said he wants to help more people “earn a living” from Facebook services. Instagram chief Adam Mosseri recently said the company was responding to a “shift of power from institutions to individuals from different industries”.

This is also the main opportunity for Facebook business to move away from advertising. Although Facebook has promised not to cut creators ’earnings for more than a year, that will eventually change (the company did not say what its cut will be, but only that be “less” than Apple’s 30 percent commission).

The creators could also provide a huge boost to the company in their purchases. The store has also been the main focus of the social network, which has already inserted shopping functions into almost every corner of Instagram, and Zuckerberg said he intends to create a “full-featured commercial platform” on Facebook services.

What is less clear is how much the creators will be willing to invest in Facebook’s vision. While the $ 1 billion investment will almost certainly spur more interest in the platform, it’s unclear if it will trigger the kind of content Facebook hopes for. Instagram Reels, for example, were supposed to be TikTok’s main competitor. Still, the company sometimes had to push creators publish there the original content.

And concerns about Facebook algorithms remain, Bruneteau says. “The algorithm should be as favorable to creators as it is on TikTok,” she says. “You have these current influencers on TikTok, who have managed to increase a million or more followers in less than a year. However, those same instant influencers who have these accounts tend to have fewer followers on Instagram. “

There are signs that Facebook might be ready to address these issues. Mosseri recently raised his eyebrows when he said it was Instagram not anymore a photo-sharing app and that the company worked in one way to insert more recommended content into user feeds to compete with TikTok.

But even kinder algorithm, both Bruneteau and Jin warn that creators should be careful in throwing too many resources into Facebook or any platform.

“When creators build their processes on top of these like centralized platforms, they actually create more value for the base platform than they are able to create for themselves,” Yin says. “At the end of the day, you strengthen Facebook’s dominance because the more content you put in there, the more it attracts consumer users and the more it translates into Facebook revenue and Facebook’s network effects.”

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